Time Efficiency Gains are Intrinsically Worthless

It takes time and money to conduct improvement projects that increase the efficiency of organizational processes. Unfortunately, many organizations fail to see a real return on such investments because they never convert the time saved to something of actual value.

19 March 2024

I often hear from business leaders and read articles and whitepapers about how an organization implemented such and such a new process or system and decreased the amount of time it takes them to do some activity by a large percentage. Unfortunately, these comments often do not include an explanation of how the time saved was converted to something of value to the organization. As such, I fear many of these organizations wasted their time and money implementing their process or system.

Time efficiency gains are intrinsically worthless. There is nothing about reducing the time it takes to complete an activity that is in and of itself valuable to an organization. Time efficiency gains only have worth to an organization when the time saved is converted to something else of value. To make this point clear, let’s look at an example.

Let’s say a non-profit food bank conducts a process improvement project and reduces the amount of time it takes to take in donated food items from four staff hours per day to two staff hours per day. This is a 50% reduction in process time. Most people would consider this project a big success. The organization has cut its process time in half and freed up two staff hours per day, or approximately 500 staff hours per year. But what of value has the organization actually gained?

The time the food bank has saved is worthless unless the organization does something to convert it to something of value, and not all time savings can easily be utilized to create value for an organization. Often large overall efficiency gains are composed of several small efficiency gains that are hard to do anything with. For example, the food bank might have trimmed a total of two staff hours off of the time it takes to take in food items, but what if this overall time savings is composed of twelve separate 10-minute time savings spread across multiple actual employees? It is going to be hard for the food bank to take these 10-minute savings here and 10-minute savings there and do anything with them to convert them to something of value. Unless the organization has multiple valuable 10-minute tasks that are not currently being completed due to a lack of staffing, these time savings are likely not going to do anything to actually improve the overall performance of the food bank.

Even in situations in which overall time savings are not composed of several small time intervals, an organization needs to take intentional action to realize its value. To see that this is true, let’s assume the two staff hours the food bank has freed up are not all split up between multiple employees. Instead, let’s say the overall time saved is composed of a single two-hour block of time for one employee. This is going to make it much easier for the food bank to convert this time to something valuable, but the organization still has to do something to make this happen. They need to take this time and utilize it to create something of value to the organization. In reality, many organizations do not actually take this step. Instead they stop their work once the time savings have been realized, seemingly leaving to chance that something good will come of the savings.

Instead of leaving the conversion of time savings to something of value to chance, organizations should plan what they are going to do with time savings before they start a process improvement project. This will ensure time savings are appropriately converted to something of value once the project is complete, and it will define for the project team what the composition of any time savings needs to be in order to be of value to the organization.

Many organizations have come to view all time efficiency gains as something valuable. In reality, only certain types of time savings can benefit an organization. And even when a process improvement produces the right type of time efficiency gain, an organization needs to take steps to ensure the time saved is used to bring about something of value to the organization.

Time efficiency gains are in-and-of themselves completely worthless, but they can be valuable tools for bringing about significant value gains to an organization. However, this does not happen magically. Organizations need to seek out the right types of time efficiency gains and then intentionally act to make sure they are appropriately utilized.